Formerly under British rule, Cyprus gained its independence from Britain in 1960. Civil unrest between the island's Greek and Turkish communities and a coup against the Cypriot government backed by the Greek military, culminated in an invasion by Turkish forces in 1974. The country remains split with the Turkish forces occupying approximately 36% of the island. The "Green Line", or buffer zone, is monitored by the United Nations (UN). This buffer zone cuts through the capital of Nicosia.
The Republic of Cyprus has a market economy dominated by the service sector, which accounts for nearly four-fifths of Gross Domestic Product ("GDP"). Tourism, financial services, and real estate are the most important sectors. Current GDP is approximately US$21,000 per person and is ranked 62nd in the world. On May 1, 2004 the country entered into the European Union. The country has both adopted the euro and the European Central Bank monetary policy. Despite the fluctuation of growth rates, the economy has grown at a rate well above the European Union average since 2000. The Republic of Cyprus also has a favourable mining code that provides security of tenure and right to access to private land for exploration purposes.
The island's morphology features a central plateau surrounding Nicosia, with mountain ranges to the north and south.
The Troodos Ophiolite Complex trends east southeasterly through the center of the island and hosts all of the known Volcanogenic Hosted Massive Sulphide (VHMS) deposits.
The Troodos Ophiolite Complex represents a preserved section of ancient oceanic crust along with underlying upper mantle rocks. Uplift and unroofing of the complex has produced a symmetrical batholithic plutonic body flanked by volcanic units of the Lower and Upper pillow lavas and overlying sediments. The volcanic units are believed to be around 100 million years old (Late Cretaceous). The Ophiolite formed along the edge of the northward moving subduction zone where the African plate encountered the Eurasian plate. The Troodos Ophiolites are unique in that they display a complete sequence of ultramafic plutonic rocks through the dyke complexes to the marine floor pillow lavas and overlying sediments.
Typically ophiolites found elsewhere in the world are often missing sections of the stratigraphy or have been extensively deformed and metamorphosed. Geological processes such as erosion, and tectonic influences such as faulting have played their part in re-working the landscape and provide a plumbing system for the emplacement of the massive and disseminated sulphide orebodies.
The history of mineral exploitation (copper, gold and other metals) on the island of Cyprus dates back to the Bronze Age, approximately 5,000 years ago, and has continued through the ages, by the Phoenicians and then the Romans. The evidence of this long history of mining is seen by the extensive slag heaps and numerous ancient surface and underground workings.
The main economic base metal deposits of Cyprus are the copper-bearing volcanogenic hosted massive sulphide "VHMS" deposits. These deposits are hosted within the pillow lava sequence of the Troodos Volcanic Complex. The pillow lava sequence is divided into Upper and Lower Pillow Lavas.
Well over 90 percent of known mineralizated deposits came to surface, and management believes that there is a high probability of additional massive sulphide bodies being present that do not outcrop. Mineral exploration on the island has been at very low levels for over 35 years and has undergone limited modern exploration techniques.
Northern Lion has entered into a binding definitive agreement with Centerra Gold (KB) Inc., a subsidiary of Centerra Gold Inc. (TSX: CG). Pursuant to the Agreement, Centerra can earn a 51% to 70% interest in a number of the Company's exploration permits located in the Larnaca and Paphos Districts of Cyprus.
To earn a 51% interest, Centerra must;
• pay US$100,000 in cash
• spend US$3 million on exploration and development over three years
Once 51% interest is earned by Centerra, either a 51/49 joint venture will be formed or Centerra may elect to earn up to 70% interest by funding an additional US$3 million in exploration and development expenditures. Northern Lion will be the operator during the first year, following which Centerra may elect to assume operatorship. Centerra's funding obligations under the agreement are subject to certain conditions, including obtaining TSX Venture Exchange approval and the receipt of certain licenses which have been applied for by the Company.
The Company and Centerra are preparing to commence a joint exploration program in the Republic of Cyprus, which will include a ground-based EM and magnetic geophysical survey over prospective areas in the Paphos and Larnaca Districts. A diamond drill program is planned to follow-up on the results of the geophysical survey.
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